Off-grid electricity pioneers pour into West Africa

Standing by a towering equatorial forest, Jean-Noel Kouame’s new breeze-block house might be beyond the reach of Ivory Coast’s power grid, but it is perfectly located for solar power entrepreneurs.

Buoyed by success in East Africa, off-grid solar power start-ups are pouring into West Africa, offering pay-as-you-go kits in a race to claim tens of millions of customers who lack reliable access to electricity.

At least 11 companies, including leading East African players such as Greenlight Planet, d.light, Off-Grid Electric, M-KOPE Solar, Fenix International and BBOXX, have moved into the region, most within the past two years.

With a potential market worth billions of US dollars, major European energy companies, such as French utilities Electricite de France SA (EDF) and Engie SA are taking notice too.

“It’s important to be there now, because the race has already started,” said Marianne Laigneau, senior executive vice president of EDF’s international division.

The main challenge facing smaller companies is how to raise enough capital to supply the expensive solar kits in return for small upfront payments from customers.

Mobilizing funding for firms providing home solar systems is also part of the US government’s Power Africa initiative. Major power generation projects have been slow to get off the ground, so Power Africa has partnered with start-ups, such as Off-Grid Electric, M-KOPE and d.light, among others, to accelerate off-grid access.

In Abidjan, Kouame does not know when, or if, the national grid will reach the outer edge of the urban sprawl, but thanks to his new solar panel kit he has indoor lighting, an electric fan and a television.

However, it is the light bulb hanging outside his front door that he values the most.

“At night we were scared to go outside,” the 31-year-old taxi driver said. “Where there is light there is safety.”

About 1.2 billion people around the world have no access to a power grid, according to the International Energy Agency (IEA).

Lighting and phone charging alone costs them about US$27 billion a year and some estimates put their total annual energy costs at more than US$60 billion.

While governments in much of the developing world are extending access to national networks, Africa is lagging, with less than 40 percent of African households connected, IEA figures show.

However, what has long been decried as a major obstacle to Africa’s development is viewed as an opportunity by entrepreneurs, such as Nir Marom, cofounder of Lumos Global, the Dutch start-up that built and sold Kouame his kit.

“I read an article about people paying US$0.50 a day for kerosene and candles, and that just didn’t make sense,” Marom said. “I said I can give them 4 kilowatt-hours for the price of kerosene. And that started everything.”

Lumos Global’s kits, which cost about US$600, include a solar panel linked to a battery that supports power sockets, a mobile phone adapter and LED light bulbs.

Kouame, who paid 30,000 CFA francs (US$57) upfront for his kit, is now leasing-to-own. A digital counter on the yellow battery pack tells him when he needs to top up his account using his mobile phone.

If he does not pay, the kit, which also houses a global positioning system, shuts down. However, in five years, he will own it outright and his solar power will be free.